David Kirkpatrick

June 27, 2008

Is the SEC growing instead?

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 12:22 pm

This post is a follow-up to one earlier this week about a Wall Street Journal article stating the SEC is on its way out and the way the Bear Stearns debacle was handled is a symptom of the disease within the commission.

Christoper Cox, current chairman of the SEC, has vehemently fired back (albeit internally) in response to Monday’s WSJ story.

From the second link:

Rarely in its 74-year history has the Securities and Exchange Commission been so squarely on the griddle, with new reforms seeming to target its very existence and Chairman Christopher Cox personally being criticized as “peripheral,” in the words of a critical Monday profile on the Wall Street Journal’s front page.

Cox has said little publicly about the criticism, much of which relates to his and the SEC’s role in dealing with the collapse of Bear Stearns and its later bailout managed by the Fed. But in internal memos made available to CFO.com, the chairman clearly seems to be simmering close to the boiling point.

In a 17-paragraph memo to the entire SEC staff that started with a note that he was “very disappointed” by the Journal story, Cox defended the SEC’s role in dealing with Bear as “one of a high degree of inter-agency cooperation.” And he noted that the SEC’s position in the case of the bailout was legally limited because the agency could not be “cast in the role of regulator of the merger and also potentially enforcer of the laws against fraud in connection with the transaction.”

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